This afternoon, Buelah and I had the misfortune of her unexpectedly overheating and quite literally going up in smoke. I was on my way to an appointment, and realized I made a wrong turn. So I pull into the parking lot of a grocery store to review the directions then alarms start sounding and smoke starts flowing out of the hood. It was like a movie scene. Buelah, whyyyy?
So I called my insurance provider to get a tow and it made me realize that there are some things we should talk about. Insurance is a big iceberg so let’s just start chipping away at the surface, shall we? First thing to know is that there are different types of coverage available to choose from and Roadside Assistance is not automatically included but you may add it if you would like. Fortunately, I pay for it as it has come in handy before. But here is a list of other types of coverage:
- Collision: This is used for repairs to your car if you’re in an accident. This is usually limited to the current cash value of the car. So if it would cost more to repair than the car is worth, then the car is considered totaled. If your policy covers a total loss, fret not! You can receive money from the company for the value of the car that you can use to purchase another if you own the car. If you’re leasing or financing, things are a bit more involved but not impossible.
- Bodily Injury: What happens if someone else is injured in accident? If you have this coverage, the insurance can take care of that for you. If you don’t, then hide yo kids and hide yo wife cuz if someone wants to sue you for everything you own to pay off their medical bills, they might just do so.
- Medical Payments/Personal Injury: What happens if you’re injured in accident? This coverage is for you and the people in your car.
- Uninsured Motorist: What happens when someone who doesn’t have insurance is in an accident with you that causes damage or injury? It’s fairly common. But if you have this kind of coverage in your policy, the insurance company can help you out to get back on the road again.
- Comprehensive: What happens when something unusual (not collision accident) occurs that damages your vehicle or it is stolen? Let’s say there’s a terrible wind storm and you come outside the next day to find a tree on top of your car. If you have comprehensive coverage, you’ll be taken care of.
- Property Damage/Liability: What happens if you damage someone else’s property with your vehicle? This insurance is for when the company sends money to another person to cover the damage you caused.
One more important thing to know is how much your deductible is-$500? $1,000? $2,000? Whatever amount you have decided, be sure that you will actually have that money available!
Deductible: This is the amount that you have to pay first before the insurance will start to cover any repairs after an accident. Let’s say you’re in an accident that damages your car, you go to an auto repair shop and they give you a quote for $3,000 to fix it all. If your deductible is $1,000 you’ll have to pay that amount first then the insurance company will cover the rest. So it’s important to save up and have that money available just in case you need it! You don’t want to be stuck without your car trying to figure out where you’re going to get that money…on top of not being able to get to work.
I highly recommend having a separate bank account just for car stuff-repairs, registration, and deductible. Ideally you won’t need to use it often at all, but when the time comes you’ll be prepared and it will make the whole process much less stressful. You will also typically find that the higher your deductible is, the lower premium you will pay. The premium is the amount you pay on your bill to the insurance company for the coverage you have selected. Weigh your options, see what works best for you.
More to come in the next post, but we’ll just get started with this. Do you feel like you have enough coverage for your vehicle? If not, what kind of coverage do you think you would like to add? Comment or Tweet me to let me know!